Fiscal cliff deal reached

The White House and Senate leaders reached a bipartisan compromise on the fiscal cliff that would allow tax rates to rise on income over $450,000 and delay steep automatic federal spending cuts for two months.

McConnell: 'We are very, very close'

Reid: We need compromise

Fiscal cliff: A primer

The Senate was poised to vote on the package some time after the clock turned to 2013 on New Year’s morning, and the House could vote later in the day on Jan. 1.

The final deal was hammered out between Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden, after nearly two months of talks between other leaders failed. President Barack Obama called Senate Majority Leader Harry Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) Monday night, and a Democratic source said both leaders signed off on the package.

But there were indications that might have slightly overstated the case: A Senate Democratic aide insisted that Reid simply offered to give Biden a chance to sell Senate Democrats on the accord, as the vice president did at a 90-minute meeting at the Capitol. And Pelosi, in a statement issued shortly after 10 p.m., did not endorse or criticize the pact: the California Democrat said she was waiting for the Senate to act and then would present it to House Democrats to gauge their reaction.

Criticism came from all quarters, though it was unclear whether it represented a serious threat to the accord’s prospects in Congress or the kind of complaints that were bound to precede such a difficult vote. Moderate Senate Democrats like Sen. Joe Manchin (D-W.Va.) said the deal “kicked the can down the road” by failing to include entitlement reform. Liberals such as Sen. Tom Harkin (D-Iowa) complained that Obama and Biden gave away too much on taxes.

There was also a tactical divide between Senate Democrats and the White House. Many Hill Democrats believed they would get a much better deal if they waited until the new year and the country went over the fiscal cliff, but Obama did not want to risk blame for potentially pushing the United States back into a recession.

Biden was enlisted to help sell the package to a skeptical caucus. Still, Sen. Chuck Schumer (D-N.Y.) said while Democrats have reservations, most agreed the deal is better than going over the cliff. Sen. Sherrod Brown (D-Ohio) called the mood in the caucus “somber.”

Sen. Max Baucus (D-Mont.) said he’s “not happy but it’s preventing an increase of tax rates for middle income Americans, and that’s very good.”

Leaving the caucus meeting, Biden said he felt “very good” about the deal’s chances, warning reporters not to predict how the House or Senate would vote.

In a statement, House Speaker John Boehner promised to consider the Senate bill, but would not say whether the chamber would try to amend or simply accept it. He said that decision would be made after members have a chance to review the legislation.

The final sticking point was over delaying the across-the-board spending cuts slated to begin Jan. 2 known as the sequester. Those cuts will be replaced in equal parts by fresh government revenues and other targeted spending reductions.

A Senate vote on the package was expected early Tuesday morning. House sources have said they almost certainly will have to wait until later Tuesday to vote.

"It’s not how Americans want to start 2013: with hefty new tax hikes and spending cuts that could send the stock market plummeting, slash defense spending and interrupt an economic recovery that was just beginning to spark."

So are democrats now going to argue that higher taxes and cuts in defense spending are bad for the economy...and blame the GOP for higher taxes and major defense cuts?

This is Obama's fault. Obama's sloppiness and lack of leadership created his fiscal cliff problem. Drama Obama should have handled his fiscal cliff problem years ago, instead of waiting to the very last moment.

WHO will get the blame for going over Obama's fiscal cliff? It's odd how differently conservatives and the left view the matter. What are the right and the WRONG things to do?

First, we must acknowledge the problem: Excessive federal SPENDING is the problem.

1). The RIGHT thing to do...

---Reduce tax rates on those paying the highest taxes, and spread out the tax burden to a MUCH wider base. Currently only 52% of workers pay federal income taxes, and 48% of workers ride for free when it comes to federal taxes. That's immoral, and it must change. The FairTax would totally cure this problem, and even a reduced Flat Tax of maybe 18-20% would be a tremendous improvement. Both of these ideas would light a fire to the economy, and the tax revenues would roll in like an avalanche.

--Reduce the regulatory NIGHTMARE that's currently coming from this administration. Small business people like myself cannot POSSIBLY keep up with the new booklets of regulations coming from the Feds. Some of them are laughably absurd, ALL of them are expensive! These new laws cannot be abided by, so we ignore them. This turns us into law breakers. There's only one word for this...TYRANNY!

--Reduce the welfare state by 2/3rds. Every person of able body and able mind, between the ages of 17-65 who's on welfare need to be kicked the hell OUT of the program. They should be getting NO taxpayer checks whatsoever. What the hell gives them the right to live a parasitic existence? Get people under the age of 60 the hell OFF of Social Security disability! The program's already bankrupt because it's being used as a giant fund for the use of politician's pet projects. I've paid into this monstrosity for 33 years (at gunpoint), and they're STEALING IT!!!!

--Reduce the federal payroll by at least half. In the last 6 years, the number federal workers has EXPLODED! They are a GIGANTIC expense, that needs to be reduced. More than their paychecks and "benefits", they produce regulations and endless other expenses for those of us in the productive portion of the economy. They need to go! This step alone could probably save 100 BILLION dollars.

2.) The WRONG thing to do...

--Raise taxes on America's business people. The president lies about and demonizes these people as "greedy millionaires and billionaires." The truth is that they ARE America's employers. The left hates them. Make sense of that? Here's the fact: If you vote to raise taxes on them, you'll get people fired as these business people trim staff to stay in business...resulting in a dramatic LOSS of tax revenue in the long run.

**When you clearly have a SPENDING problem, you do NOT vote to raise taxes on employers. You seriously address SPENDING!

This is Obama's fault. Obama's sloppiness and lack of leadership created his fiscal cliff problem. Drama Obama should have handled his fiscal cliff problem years ago, instead of waiting to the very last moment

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Indeed, but remember that Obama WANTS the turmoil! He WANTS the perpetual "crisis." It allows him to expand his power. This guy is an Alinskyite "community organizer", and as long as you understand what motivates him, his insanity makes perfect sense.

Republicans' only interest (besides shredding the social safety net) is protecting tax windfalls for the richest. Top tax rates and estate taxes, which are paid mainly by the wealthy, are the two big priorities of McConnell and Boehner in negotiations. You don't see them holding something hostage until payroll tax hikes (which hit all of us) are rescinded or until the alternative tax rate (which will hit many in the middle class) is revoked. No, only the rich and their tax concerns count to Republicans.

Our best hope is that the new year dawns before the Obama-led Democrats can give away guaranteed victory and a much better solution.

Tragic, simply tragic, that those making more than 400K will somehow have to scrape up enough to pay for the Clinton era tax rates; let those on Medicare and Social Security take the brunt of the costs.That would be the only fair deal....

JINGOIST - "Indeed, but remember that Obama WANTS the turmoil! He WANTS the perpetual "crisis." It allows him to expand his power."-------Yeah it's hard to see how Obama would be able to create the 'perpetual crisis" and "turmoil" without the help of the Republican party. On fiscal matters the Republican party is doing everything to ruin a fragile recovery, but politically they have been a godsend for the Obama administration.

“We’d like to be able to offer some amendments” to a cliff deal, said Sen. John Cornyn of Texas, the incoming GOP whip. Of course you would, John. Amendments known as "poison pill amendments" -- adding things so odious (and irrelevant) that even Democrats can't vote for the deal. That way, Republicans won't look like the only ones rejecting a saving solution and the only ones forcing us into extreme tax hikes and spending cuts. Such Republican stunts are childish and embarrassingly transparent to all but political neophytes.

I am sick and tired of this whole situation. The well-fed Congress is not going to have to tighten their belts if we go over the fiscal cliff. However, all those currently receiving unemployment benefits will be immediately cut off. With the amount of people unemployed, that is a serious problem.

If it was at all possible, I would say "Cut all of Congresss' paychecks in half until they get this done." How easy it is to refuse to do anything when YOUR livelihood isn't at risk. You can sit down at a lovely New Year's dinner and not wonder where your next meal is coming from. Congress is a complete and utter disgrace!!!

JINGOIST: "At what rate does taxation become THEFT--in your opinion, of course."

Taxes have long become theft in my mind. Then again, you and I believe in a honest day's work and earning what we have. Others depend on the nanny style government to care for them from the cradle to the grave. They never mature enough to be able to take care of themselves, nor do they ever desire too. So sad...

I make enough to live comfortably but I know those who can barely keep their eyes open at work, because they have to work two jobs to make ends meet. Medicare cuts, and cuts to Social Security are going to have real impacts on working Americans, but please spare me the crocodile tears of the horrors of paying the Clinton era tax rates for those making over 400K.

Obama and his Democrats have been dragging their feet on this bill, hoping for a last-minute bill rushed through so that no one can read it. It needs to be one that is comprehensive and carefully thought out. If they come up with a last-minute bill today, then no one will even have time to read it. The last time a bill was hurried through Congress with no one allowed to read it, we ended up with Obamacare.